A graph representation of the financial relations in a given monetary structure is proposed. It is argued that the graph of debt-liability relations is naturally organized and simplified into a tree structure, around banks and a central bank. Indeed, this optimal graph allows to perform payments...

The NSFR regulation reduces banks’ liquidity risks by encouraging the use of deposit funding. Deposit money is created by lending, but the requirement restricts possibilities to grant loans. This contradiction may be destabilising if there is a substantial foreign debt.

In this paper, I examine whether Hyman P. Minsky adopted an endogenous money approach in his early work - at the time that he was first developing his financial instability approach. In an earlier piece (Wray 1992), I closely examined Minsky's published writings to support the argument that,...

In a paper for the Review of Keynesian Economics, Steve Keen recently provided a restatement of his claim that "effective demand equals income plus the change in debt". The aim of the present article is to provide a detailed critique of Keen's argument using an analytical framework pioneered by...

In a paper for the Review of Keynesian Economics, Steve Keen recently provided a restatement of his claim that "effective demand equals income plus the change in debt". The aim of the present article is to provide a detailed critique of Keen's argument using an analytical framework pioneered by...

In this paper, I examine whether Hyman P. Minsky adopted an endogenous money approach in his early work--at the time that he was first developing his financial instability approach. In an earlier piece (Wray 1992), I closely examined Minsky's published writings to support the argument that, from...

In this paper, I examine whether Hyman P. Minsky adopted an endogenous money approach in his early work - at the time that he was first developing his financial instability approach. In an earlier piece (Wray 1992), I closely examined Minsky's published writings to support the argument that,...

In a paper for the Review of Keynesian Economics, Steve Keen recently provided a restatement of his claim that "effective demand equals income plus the change in debt". The aim of the present article is to provide a detailed critique of Keen's argument using an analytical framework pioneered by...

In order to understand from where the profits or monetary profits of capitalists and firms emerge the author examined the phrase of Marx, 'Die Gesamtklasse der Kapitalisten kann nichts aus der Zirkulation herausziehen, was nicht vorher hineingeworfen war.' (The class of capitalists cannot...

Vymyatnina, Yulia; Pakhnin, Mikhail - Department of Economics, European University at St. … - 2014

The global financial crisis of 2007–2008, consequences of which continue to adversely affect the world economy, is often called a ‘Minsky crisis’. A prominent American economist Hyman Philip Minsky studied capitalist economic system paying special attention to its major properties, in...

Beyond agreement on the basic principles of money’s endogeneity, the development of Post-Keynesian monetary theory has been characterized by considerable dissent and debate. One important aspect of this debate concerns the shape of the credit supply curve in quantity of credit/interest rate...

We built a real business cycle model with inside money and passive monetary policy that shows some interesting features regarding interest rate dynamics and credit market behavior. We find that the model is stable, a feature that was difficult to find in the literature on passive money. We think...

In order to understand from where the profits or monetary profits of capitalists and firms emerge the author examined the phrase of Marx, 'Die Gesamtklasse der Kapitalisten kann nichts aus der Zirkulation herausziehen, was nicht vorher hineingeworfen war.' (The class of capitalists cannot...

Endogenous money is a core component of post-Keynesian economics, but it has not been fully integrated into its macroeconomics. To do so requires replacing the accounting truism that ex post expenditure equals ex post income with the endogenous money insight that ex post expenditure equals ex...

Steve Keen argues that post-Keynesians have not sufficiently emphasized the revolutionary character of endogenous money for macroeconomic theory, and that this should be done by recognizing that aggregate demand is equal to current or past income plus the change in debt. This equation,...

This paper offers a constructive critique of â€˜The Chicago Plan revisitedâ€™ published by Jaromir Benes and Michael Kumhof (2012) as an IMF working paper. On the one hand, there are reasons to query the exact details of the proposed reform, including claims of large steady-state output...

In order to understand from where the profits or monetary profits of capitalists and firms emerge the author examined the phrase of Marx, 'Die Gesamtklasse der Kapitalisten kann nichts aus der Zirkulation herausziehen, was nicht vorher hineingeworfen war.' (The class of capitalists cannot...

The paper explains a curious redirection of economic policies that uses the policy framework of Kalecki and Keynes only to undermine it. It does not negate their theory of demand management, but reformulates it to serve the powerful interests of finance in the era of financial globalisation. As...

MODERN MONETARY THEORY (MMT) notes correctly that money is a creature of the state, and that important macroeconomic and policy conclusions follow from this understanding, e.g., sovereign states are not revenue constrained and spending is primarily limited by inflation. Taxes give value to state...

A fundamental cause of the global financial crisis was excessive maturity mismatch, notably shadow banking holdings of sub-prime MBS and other structured credit instruments and cross-border Euro area interbank lending to the uncompetitive Euro area periphery. The costs of short term funding do...

A hybrid standard macro model is supplemented by an explicit analysis of bank lending, based on a five-position aggregative balance sheet. In the model's two versions credit supply is based on a leverage targeting rule or on simple optimisation, taking into account lending risks and funding...

The complexity of credit-money is conceived as the central issue in the banking-macro nexus, which the authors consider as a structural as well as process component of the evolving economy. This nexus is significant for the stability as well as the fragility of the economic system, because it...

This paper uses the occasion of the twenty-fifth anniversary of Basil Moore’s book, Horizontalists and Verticalists, to reassess the theory of endogenous money. The paper distinguishes between horizontalists, verticalists, and structuralists. It argues Moore’s horizontalist representation of...

A hybrid standard macro model is supplemented by an explicit analysis of bank lending, based on a five-position aggregative balance sheet. In the model's two versions credit supply is based on a leverage targeting rule or on simple optimisation, taking into account lending risks and funding...

This paper uses the occasion of the twenty-fifth anniversary of Basil Moore's book, Horizontalists and Verticalists, to reassess the theory of endogenous money. The paper distinguishes between horizontalists, verticalists, and structuralists. It argues Moore's horizontalist representation of...

The complexity of credit-money is conceived as the central issue in the banking-macro nexus, which the authors consider as a structural as well as process component of the evolving economy. This nexus is significant for the stability as well as the fragility of the economic system, because it...

A number of debates are taking place regarding the appropriate response of monetary policy both to the crisis and the Great Recession that followed, particularly in regard to interest on reserve balances and so-called unconventional monetary policy operations. This paper describes in detail an...

The purpose of this paper is to shed light on the endogenous nature of money. Contrary to the established post-Keynesian, or evolutionary, view, this paper argues that money has always been endogenous, irrespective of the historical period. Instead of the evolutionary theory of money and banking...

The idea that effective demand is closely connected with money supply has emerged a number of times in the history of economic thought, within approaches differing in origin and formulation. In particular, we analyse Lange and Patinkin’s theses and those of Luxemburg and the money circuit...

Previous analyses of macroeconomic imbalances have employed models that either focus exclusively on real-side effects or financial-side disturbances. Real-side models usually make the unrealistic assumption that firms that save more than they invest effortlessly and costlessly transfer those...